Fahrenheit co-founder Rich Reinecke (right) and Keith Middleton.
Rich Reinecke and Keith Middleton began their business partnership over beers nearly 15 years ago. Now they’ve just toasted the sale of their company.
The pair recently sold their Scott’s Addition-based firm Fahrenheit Advisors to Smith + Howard, a national accounting firm out of Atlanta.
As part of the deal, terms of which were not disclosed, Reinecke and Middleton continue in their roles as co-CEOs of Fahrenheit under the Smith + Howard umbrella.
“We’re keeping the name, we’re keeping the brand, all our services and all our employees remain,” Middleton said.
Fahrenheit and its 140 employees – 80 of which are based in Richmond – offer services for organizations needing a fractional or interim chief financial officer and chief human resources officer, as well as executive search, sales, strategy and other business advisory services.
Reinecke said the deal with Smith + Howard came about as Fahrenheit pondered how to accelerate the firm’s growth nationally beyond Richmond and neighboring regions like Hampton Roads.
“We’ve had a focus of growing and scaling the firm and we’ve done that extremely well across the Richmond region and we’ve expanded in the 757,” Reinecke said. “As we continued to work toward growing nationally, it became evident you can go a whole lot faster if you have a partner with a great brand and additional geographic reach.
“It’s an opportunity for us to continue to go down the path of growth that we’ve always wanted and gives us the opportunity to have that partner and remain involved,” Reinecke added.
Fahrenheit enlisted Boston-based investment banking firm BellMark Partners to search for a buyer, and Middleton said S+H, which has been on an acquisition streak since taking on a private equity backing in 2022, matched with what they were looking for. And Fahrenheit fit S+H’s model of adding services to its mix that go beyond traditional accounting.
“It was great fit from a culture perspective. And their growth strategy was geography and service lines, and our service lines complement them as a CPA firm,” Middleton said.
S+H’s recent acquisitions have taken it to Chattanooga, Tennessee, and Dallas, Texas. It also has a presence in markets such as Chicago and Nashville and was looking for its first foothold in the Mid-Atlantic.
Reinecke and Middleton were the sole owners of Fahrenheit in the Nov. 26 sale. They took on some equity in S+H as part of the deal.
While he and Reinecke remain fully engaged in Fahrenheit, Middleton said the deal does provide the beginnings of an eventual exit strategy for the two founders and continuity for the firm and its employees beyond that.
“This helps provide a succession for Fahrenheit, so one day we will exit,” he said, adding that isn’t expected to be anytime soon.
Fahrenheit will remain in its headquarters in the HandCraft Building in Scott’s Addition.
Reinecke and Middleton were passing acquaintances when local angel investor Karen Booth Adams encouraged them to put their heads together in 2009.
“Karen was smart enough to connect the two of us. We had only met each other a couple times,” Middleton said.
Middleton had been working at Performance Food Group at the time, while Reinecke had his own executive search firm.
“We spent about an hour and a half and had two beers and a plate of wings and said, ‘I have no idea who you really are but I will change my life and start a business with you,” Reinecke said, laughing.
They started the company as Fahrenheit Finance early in 2010. They knew they were on to something that summer when they landed their first big client, Mid-Atlantic Convenience Stores.
“It really proved the model that we could do interim consulting and executive search,” Middleton said.
As the company’s suite of services evolved over the years, so did its name. For a time, it was known as Fahrenheit Group as it added HR and advisory offerings, before switching to its current moniker in 2019. Booth Adams was an early investor and exited after a couple years.
Today Fahrenheit’s client base includes larger middle-market companies, private equity-backed firms, nonprofits and state and local governments.
Middleton and Reinecke declined to comment on the company’s annual revenue presently.
Fahrenheit will remain in its office in the HandCraft Building in Scott’s Addition, which it moved into in 2017. It also has a small outpost in Virginia Beach.
Middleton said they expect S+H to eventually open an office of its own in the Richmond area for the other arms of its operations.
Looking ahead, the longtime partners said they’re most excited about the added firepower from joining S+H, which will come from being able to offer Fahrenheit’s services to S+H’s clients, and vice versa.
“We have a lot of clients, they have more,” Reinecke said. “So being able to integrate our team and services across their client base is going to be pretty impactful.”